Tuesday, October 26, 2010

Cebu Pacific makes record debut at Philippine bourse

MANILA: Philippine budget airline Cebu Pacific soared on its stock exchange debut Tuesday as it said its initial public offering had become a record for the country.The firm's shares rose 6.4 percent to end at 133 pesos on the Philippine Stock Exchange, from its opening price of 125 pesos.It said its IPO eventually raised 539 million dollars after selling 186.6 million shares, or 30.4 per cent of outstanding stock, to local and foreign investors."The IPO is the largest ever conducted in the Philippines in US dollar terms," the company claimed in statement.Monday's strong rise came as the broader market slipped 0.17 per cent.Proceeds from the IPO would be used to boost its fleet, Cebu Pacific said, adding that by 2014 it will have taken delivery of 22 new Airbus A320 aircraft.Stock exchange chairman Hans Sicat said Cebu Pacific's listing came at a time when the bourse was setting record highs, with the key index gaining 40.43 per cent over the year-to-date."It is the first transaction in the aviation business, and perhaps more importantly, it is a landmark deal in the low-cost carrier sector, setting a benchmark amongst regional and global LCC peers," Sicat said.Cebu Pacific chief executive Lance Gokongwei said the firm planned to expand its international operations and make it the airline's major source of revenue in about five years.While international passengers account for 15 per cent of the total flown by the airline, they account for 38 per cent of total revenue, he said.New destinations in the Asia Pacific region were being planned, while current flight frequencies would also be increased, he said.Cebu Pacific is Asia's third largest low-cost carrier and operates from four hubs in the Philippines while flying to 33 domestic and 16 international destinations.